Spain as the new lighthouse of Europe
The Spanish economy has become the most significant among European economies. In 2023, Spanish GDP grew at an annual rate of 3%, compared to 1% for the Eurozone, displacing Germany and France from the continent’s leading economies. The OECD had forecast Spanish economic growth of 2.6% this year and 2% in 2026, in line with government and Banco de España forecasts, but these were recently revised upward again, estimating GDP growth of 2.9% in 2025 and 2.2% in 2026, 3 and 2 tenths higher, respectively, than the previous outlook. Rating agencies have also recently recognized the country’s improved creditworthiness, upgrading its rating. Indeed, the relationship between France and Spain on the cost of debt has now reversed and is lower in Spain, which has improved its ranking: the agencies have downgraded France (from AA to A+) and upgraded Spain’s rating (from A to A+). For The Economist, Spain was “Country of the Year” for 2024. Last year, it recorded the highest growth rate of any OECD economy, including the US, with a 3.2% GDP growth rate, four times the EU average. It achieved these results thanks to several factors: legislation favoring labor flexibility, significant foreign direct investment, the integration of foreign labor, Next Generation EU funds, and an unprecedented influx of tourists. There are many reasons why Spain is experiencing a period of strong economic growth, bucking the trend of its neighbors:
